$41M paid out so far in FCC's 'rip and replace' program$41M paid out so far in FCC's 'rip and replace' program
Congress has allocated about $1.9 billion to help US network operators remove Huawei and ZTE gear, but many service providers say a total of about $5 billion is needed.
January 12, 2023
The FCC has sent checks totaling $41 million to US network operators to help them pay for the removal of equipment provided by Chinese vendors Huawei and ZTE from their networks. That figure will likely grow in the coming months as more operators submit additional expenses to the program.
Congress has allocated about $1.9 billion for its Secure and Trusted Communications Networks Reimbursement Program, widely known in the telecom industry as the 'rip and replace' program because participants are charged with ripping out Huawei and ZTE equipment and replacing it with "trusted" equipment from companies such as Ericsson, Nokia and Mavenir.
However, dozens of mostly smaller US network operators participating in the effort believe that far more funding is needed – roughly $3 billion more – to finish the job.
"To date, 30 Reimbursement Program recipients have, collectively, submitted 1,988 Reimbursement Claim Requests," the FCC wrote in a new progress report about the program. "The Bureau and OMD [Office of the Managing Director] have approved $40,965,745 in Reimbursement Claims."
Figure 1: (Source: Huawei)
In its report, the FCC estimates that 2% of recipients have completed their rip and replace work, while another 15% have not yet started. The remainder are at some point in between.
The Rural Wireless Association (RWA) trade group, which represents many of the companies participating in the program, blasted the FCC's "slow progress" in allocating funds, as well as lawmakers' apparent unwillingness to put more money into the program.
"It is time for the FCC to work quickly with the Fund Administrator [of the program] to resolve these processing issues and develop a more streamlined process," the association wrote in a statement. "That coupled with an appropriation from Congress, to fully fund this program, would go a long way in alleviating the issues noted in the most recently submitted status updates made by Reimbursement Program participants."
In its status report, the FCC outlined a handful of problems reported by companies participating in its program: "They are experiencing four main challenges in their efforts to permanently remove, replace, and dispose of covered communications equipment and services in their networks: (1) lack of funding; (2) supply chain delays; (3) labor shortages; and (4) weather-related challenges."
Some of the dozens of companies hoping to get money from the program include Viaero Wireless, Union Wireless, ATN International and Gogo. Ericsson has announced several deals to supply replacement equipment.
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